Page:History of Iowa From the Earliest Times to the Beginning of the Twentieth Century Volume 2.djvu/153

bly was over the suppression of the last remnant of what was known as “wild cat” currency in the State. In pioneer times, gold and silver were for the most part used as money. The Miner’s Bank of Dubuque was the only one established in Iowa in early days, and when that failed, the people lost confidence in paper money, and in the first Constitution of the State prohibited the establishment of banks with power to issue paper money. The object of this provision was clearly to rid the State of bank notes and every form of paper currency, recognizing gold and silver only as lawful money. But it utterly failed to exclude the objectionable currency and in a few years our State was flooded with disreputable paper promises to pay. After ten years of trial of this constitutional prohibition and its disastrous failure to exclude the “wild cat” currency, another plan was adopted in the Constitution of 1857. The prohibition was removed and the General Assembly was authorized to enact laws for the establishment of banks of issue, to take effect only after having been approved by the people at an election. A system of sound money and safe banking was enacted by the Seventh General Assembly, and it was expected that the notes of the State Bank of Iowa, which were always redeemable in specie, would displace the “wild cat” currency which still lingered in spite of all efforts to dislodge it. As the war proceeded most of the banks of the country, as well as the National Government, were compelled to suspend specie payment, gold, silver commanded a high premium, and consequently were retired from general circulation. Treasury notes took their place to a large extent, and came into use as the common currency of the country; and, as they were not redeemable in specie, the State Bank bills which were gradually retired from circulation. In 1863 an act of Congress was passed for the establishment of National banks, and the Tenth General Assembly made the notes of these banks receivable for taxes.